Global Oil Prices take a tumble after misleading trade war rumours

Currently, there is a trade war between the US and China and the global economy is suffering from that trade war as well. However, we saw the two parties meet in Washington last week where they discussed a possible deal for the trade war. But it was learnt that a deal could not be achieved while US President Donald Trump said that this is just the beginning of a broader deal which will be taking place soon.

Since these reports came out on Friday, OilPrice.com reported that the oil prices were rising due to optimism in the markets regarding the end of a trade war. However, it all sizzled on Monday morning when the fine print of a deal that was achieved by the US and China came into light.

Because it was on the starting day of a new business week that rumours started to circulate in the market that no deal was achieved. The Chinese authorities only agreed to buy US agriculture on the negotiations that their tariffs for October would be halted. Also, US President said that a broader deal would be discussed and signed very soon but the Chinese camp sources reveal that they need to meet once again in October to discuss the deal before signing it. These reports meant that the oil prices fell down considerably on the first day of trading for the week.

In a statement, Tom Orlik and Yelena Shulyatyeva from Bloomberg said that their “Past experience is that U.S.–China trade agreements aren’t worth the paper they are written on, and this one hasn’t even been written down,”. And added that “For now, though, indications on trade are a little more positive. If that persists, it could help put a floor under sliding global growth”. This tells us that the US-China trade deal is still not a certainty and the trade war could continue even longer.